Help
For Families Facing The Loss of Their Home.
EXPLORE LOAN WORKOUT SOLUTIONS
First and foremost, if you can keep your mortgage current,
do so.
However, if you find that you are unable to make your mortgage
payments, you may qualify for a loan workout option. Check
with your lender to find out which of these options may be
available.
If YOUR PROBLEM IS TEMPORARY- CALL YOUR LENDER
Reinstatement: Your lender is always willing to discuss
accepting the total amount owed to them in a lump sum by
a specific date. They will often combine this option with
a Forbearance.
Forbearance: Your lender may allow you to reduce or suspend
payments for a short period of time after which another option
must be agreed upon to bring your loan current. A forbearance
option is often combined with a Reinstatement when you know
you will have enough money to bring the account current at
a specific time in the future. The money might come from
a hiring bonus, investment, insurance settlement, or a tax
refund.
Repayment Plan: You may be able to get an agreement to resume
making your regular monthly payments, in addition to a portion
of the past due payments each month until you are caught
up.
If it appears that your situation is long-term or will permanently
affect your ability to bring your account current:
Mortgage Modification: If you can make the payments on your
loan, but you do not have enough money to bring your account
current or you cannot afford the total amount of your current
payment, your lender may be able to change one or more terms
of your original loan to make the payments more affordable.
Your loan could be permanently changed in one or more of
the following ways:
Adding the missed payments to the existing loan balance.
Changing the interest rate, including making an adjustable
rate into a fixed rate.
Extending the number of years you have to repay.
Claim Advance: If your mortgage is insured, you may qualify
for an interest-free loan from your mortgage guarantor
to bring your account current. The repayment of this loan
may be delayed for several years.
If KEEPING YOUR HOME IS NOT an OPTION - CALL YOUR LENDER
SALE: If you can no longer afford your home, your lender
will usually agree to give you a specific amount of time
to find a purchaser and pay off the total amount owed. You
will be expected to obtain the services of a real estate
professional who can aggressively market the property.
Pre-Foreclosure Sale or Short Payoff: If the property's sales
value is not enough to pay the loan in full, your lender
may be able to accept less than the full amount owed. This
option can also include a period of time to allow your
real estate agent to market the property and find a qualified
buyer. Monetary help may also be available to pay other
lien holders and/or help toward paying a few moving costs.
Assumption: A qualified buyer may be allowed to assume your
mortgage, even if your original loan documents state that
it is non-assumable.
Deed-in-lieu: Your lender may agree to allow you to voluntarily "give
back" your property and forgive the debt. Although this
option sounds like the easiest way out for you, generally,
you must attempt to sell the home for its fair market value
for at least 90 days before the lender will consider this
option. Also, this option may not be available if you have
other liens such as judgments of other creditors, second
mortgages, and IRS or State Tax liens.
Resources for finding a real estate agent and selling your
home
If you need to sell your home, there will be many questions
you have to answer. You will need to find how much your house
is actually worth, and you will have to find a real estate
agent you are comfortable with. The following resources will
help:
- Realtors in Your Local Area
- Realtors in Your Local Newspapers or yellow pages
- Ask Friends Who Have Used a Realtor They Liked
SPECIAL DISASTER RELIEF OPTIONS - CALL YOUR LENDER
If your property has been damaged by a natural disaster or
if you have been called up for active military duty or affected
by a national tragedy, such as the terrorist acts of September
11, 2001, there may be additional assistance available.
Called back to Active Military Duty: HUD has a toll-free
number for servicemen and women with questions concerning
their mortgage. For more information, call 1-888-297-8685
between the hours of 7 a.m. and 7 p.m. Central Standard
Time on weekdays.
BEWARE of PREDATORY LENDING SCHEMES:
Most mortgage lenders are reputable and provide a valuable
service by allowing families to own a home without saving
the thousands or hundreds of thousands of dollars necessary
to buy it outright. However, a few, unscrupulous lenders,
especially those who make high risk second mortgages, engage
in predatory lending practices that can increase the likelihood
that a borrower will lose his or her home to foreclosure.
These abusive practices include making a mortgage loan to
an individual who does not have the income to repay it, charging
excessive interest, points and fees or repeatedly refinancing
a loan without providing any real value to the borrower.
Borrowers facing unemployment and/or
foreclosure are frequent targets of predatory lenders because
they are desperate to
find any "solution" to their default.
Homeowners frequently receive refinance
offers in the mail telling them that they have been "pre-approved" for
credit based on the equity in their home. When you are wondering
how you are going to pay your mortgage and other bills, it
may appear very attractive to borrow against your house.
But consider this, if you cannot make your current payments,
increasing your debt, even if you get some temporary cash,
will make it harder to keep your home.
Beware of Scams:
Equity skimming: a buyer offers to repay the mortgage or
sell the property if you sign over the deed and move out.
Phony counseling agencies: offer counseling for a fee when
it is often given at no charge at legitimate agencies.
Do not sign anything you do not understand. It is your right
and duty to ask questions.
Information is your best defense against becoming a victim
of predatory lending especially for a desperate homeowner!
Where to Report Suspected Predatory
Lending – homeowners
can either visit the Stop Mortgage Fraud web site or call
1(800) 348-3931 to get information on what steps to take
to file a complaint. Homeowners calling the 800 number will
receive a brochure that contains information also found on
the Web site.
Frequently Asked Questions (FAQ)
Q. How do I know who my lender is and how to contact them?
A. Look at your monthly mortgage coupons or billing statements
for the name of your lender and contact information.
Q. I do not remember what type of mortgage loan I have,
how can I find this information?
A. Look on the original mortgage documents or call your mortgage
lender.
Q. Do I need to keep living in my house to qualify for assistance?
A. Typically, yes, but call your lender to discuss your specific
circumstances and get advice on options that may be available.
Q. What type of information should I have ready to discuss
with a lender?
A. Typical information requested by lenders in a workout
package include:
- Brief explanation of circumstances
- Recent income documents
- List of household expenses
Q. My employer has already announced layoffs within the
coming months, what can I do now?
A. Through this website you have taken the first step toward
educating yourself about available options. Determine if
the layoffs will cause a financial hardship that will make
it hard for your family to make your mortgage payments. If
so, consider other resources that you have available to pay
your mortgage. Review your spending habits and see where
you can reduce spending. If you have a lot of consumer debt,
consider contacting a nonprofit, consumer credit counseling
agency. Take advantage of any employer offered resources.
If you still believe that you will have trouble making your
mortgage payments, contact your lender right away.
Q. Will there be any out-of-pocket expenses I will be responsible
for if I am approved for a workout option?
A. Some workout options do include expenses that the borrower
is expected to pay, for example, recording fees for a loan
modification. Because, every situation is different you should
contact your lender for more information. However, if a lender
has no contact with a borrower and has to start foreclosure,
the legal fees that the borrower will be expected to pay
can be very expensive. To avoid unnecessary legal fees, call
your lender as soon as you realize you are in trouble.
Go directly to the loss mitigation department of the "help
for homeowners" lenders that are ready to help you.
Related Link:
Article: We Buy Houses, Home Scams[click
here]
- Housing Counseling
- Contact Your Lender NOW!
- Talk To A Housing Counseling Agency
- Prioritize Your Debts
- Explore Loan Workout Solutions
- Are You Eligible for Disaster Relief/Military Options?
- Beware of Predatory Lending Schemes
- Try Other Resources
[Click here for assistance forms for financial disasters]
Part
1 of article starts here>
Lois Center-Shabazz is the founder of MsFinancialSavvy.com
and author of the 3-time award-winning personal
finance book, Let's Get Financial Savvy! ISBN
#0971979502.
Article
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